Infor Confidential Template V.24, 1-Mar-2007 Bruce Gheesling – Sr. V.P GAS March 20, 2007 David Berger; Contributing Editor, Plant Services magazine –

Copyright © 2001-2007 Infor Global SolutionsInfor Confidential

Bruce Gheesling – Sr. V.P GAS March 20, 2007

David Berger; Contributing Editor, Plant Services magazine – WMCRod Ellsworth; Vice President Global Asset Sustainability – Infor

Six Key Metrics to Align Asset Management & Energy Efficiency

2 Copyright © 2001-2007 Infor Global Solutions

Western Management Consultants

General management consulting, including asset management

Five offices across Canada www.wmc.ca David Berger

Contributing Editor, Plant Services magazine 15+ years industry experience, incl. executive roles Founding President of PEMAC


Capture the Right Metrics: Benefits

Define success for your asset performance management Move to a more planned environment Improve control of assets Lower operating costs and increase revenue opportunities Measure to motivate


Challenges in Working with Metrics

Too few or incorrect metrics that don’t trade off Improvement in one may result in deterioration of another

Too many measurements No focus across the organization Expensive to collect and track Increased likelihood of errors

Risks of not using the right metrics Major safety, environmental or operational failures Reduced efficiency resulting in financial loss Total plant shutdown


Poll – Question

OEE question to viewers


What are the 6 Key Metrics?

Maximize 5: Availability (vs machine downtime) Utilization (vs available but not used) Reliability (eg. MTBF, MTTR) Performance (ie, efficiency) Quality of output

Minimize 1: Total Cost of Ownership (ie, lifecycle cost)


OEE is Insufficient

OEE is “Overall Equipment Effectiveness”

OEE = Actual Output from an Asset / Theoretical Maximum Output from that Asset

OEE = Availability x Performance x Quality

The problem with OEE: Does not explicitly capture all of the tradeoffs

(eg, reliability, utilization, and total cost of ownership)

May miss the largest cost drivers(eg, energy efficiency, emissions, throwing people at a problem)

Formula complicated and not easily understood – better to track the individual metrics

Obscures the root cause


The Bigger Picture

MRO spending: US companies spend $100 Billion annually on capital equipment and services

Energy spending: US companies spend $400 Billion annually on energy – and climbing

Next to personnel, the single highest cost for a typical manufacturing facility is energy

So why do companies maximize asset availability / performance / quality (ie, OEE) without properly understanding the two biggest cost drivers?

Would you take on the cost of a high performance limousine, that is always available, and gives you a quality ride from A to B, if it has a high purchase price, guzzles gas, requires a team of people to maintain, has a poor economic life, and is scoffed by passersby?

OEE does not tell the whole story


Energy Prices are Rising

From a survey conducted last fall by Plant Services magazine, it is clear that business leaders are concerned about rising energy prices – 77.3% felt energy prices would have the highest impact

What current trends do you think will have the most impact on operations in U.S. manufacturing plants? (check all that apply)

020406080

100120140

Environm

entalregulations

Autom

ation

Advancedprocess

Global

competition

ISO

_____

Energy prices

Raw

material/capital

Improved

productivity

Safety andsecurity

Worker safety

Global

economy

R&

D

Outsourcing

Dow

nsizing

Loss ofinstitutional

Other


Key Asset Performance Analysis Tools

A. Criticality Analysis – Looking Forward based on Engineering Design

B. Failure History Analysis – Looking Forward Based on History

C. Predictive Maintenance Analysis – Looking Forward Based on History/Eng/Stats

D. Lifecycle Analysis – Repair/Replace Decision Based on Cost History


A. Criticality AnalysisLooking Forward based on Engineering Design

1. What does this component do?

2. What happens if it fails?• Catastrophic• Major safety, environmental or operational impact (eg total shutdown)

• Reduced efficiency• Other financial loss (eg. quality problems)• Negligible impact (therefore run to failure)

3. What maintenance program is required for this component (cost/benefit analysis)?• Reactive (run to failure)• Preventive (time-based inspection)• Predictive (condition-based monitoring – what are the predictors?)

Examples: replace the light bulb; change the oil; replace the bearings

reactive preventive predictive


B. Failure History AnalysisLooking Forward Based on History

Considering asset sustainability (eg, energy costs, environment), is a new approach to EAM.

Coded Description Frequency TotalField (%) Cost ($)

Cause Faulty bulb 45 15,000Loose bulb connection 20 40,000Loose wire 15 10,000Broken ballast 10 15,000Surge at power source 5 2,000Intermittent ground fault 5 1,000

83,000


Problem Light out 35 22,000Humming noise 30 95,000Light flickers 20 83,000Light incorrect colour 10 20,000Weak light 5 5,000

225,000


Action taken Replace bulb 35 11,000Tighten bulb connection 30 9,000Repair socket 20 15,000Replace socket 10 3,000Repair bulb 5 2,000

40,000

Most companies are stuck in an old OEE paradigm.

What does your EAM system provide?

What are the cost drivers?


C. Predictive Maintenance AnalysisLooking Forward Based on History/Eng/Stats

Identify high cost failures: (eg, engine failure)

Examine history of failure and determine correlated conditions prior to failure: (eg, temperature, energy usage, or excessive emissions prior to engine failure)

Track trends in condition of predictor: (eg, spikes in energy usage and trends to upper control limit)

Take appropriate action depending on severity: (eg, activate an alarm, send an email, and/or launch a PM routine to inspect)

Improve equipment performance and reliability using root cause analysis: (e.g., monitoring energy consumption increases MTBF)


D. Lifecycle AnalysisRepair/Replace Decision Based on Cost History

Determine problem codes that resulted in high repair/replace costs charged to a given asset: (eg, spent average of $10,000 on replacing type 1 motors)

Examine historical data to determine root cause:(eg, spikes from power source vs faulty motor)

Perform cost/benefit analysis for repair/replace decisions: (eg, $200 to filter spikes vs $10,000 to replace motor)

Replace asset/component if total cost of repair exceedsreplacement cost, assuming alleviation of root cause: (eg, if spikes, don’t replace motors; if faulty motor, it may be cost-effective to replace with alternative motor)

Repeat for predictive based on engineering probabilities: (eg, high probability that motor will fail within the year based on energy consumption)


Case Study

Large asset-intensive company in energy sector More than 1000 assets Multiple CMMS/EAM packages looking to consolidate No clear maintenance strategy Poor history records

Solution:

Chose key assets/components for pilot Tracked history via CMMS/EAM Used analysis tools to determine optimal maintenance policy

(reactive/preventive/predictive) Results: Significant savings (+20% savings)

Copyright © 2001-2007 Infor Global SolutionsInfor Confidential

Bruce Gheesling – Sr. V.P GAS March 20, 2007

Rod EllsworthVice President Global Asset Sustainability – Infor

Six Key Metrics to Align Asset Management & Energy Efficiency


Poll – Question

Energy Efficiency question


Asset Performance

Capacity, Availability, Quality

Financial Performance

< 30% of O&M Expense

Based on industry standards

EAM Enablement

Yesterday

The management of property, plant, and equipment to meet

a company’s valid operations and financial

requirements

EAM Evolution – “The Paradigm Shift”Global Asset Sustainability

Asset Performance Capacity, Availability, Quality

Financial Performance > 80% of O&M Expense

Environmental Performance GHG & Fugitive Emissions

GAS Enablement

Today

Enriched Infor Solution

Enriched Infor Solution

Infor SolutionInfor Solution


the operations, economic, and socio-economic needs of

today without compromising the ability of future generations to meet their own such needs.

Rod Ellsworth;Vice President, Infor Global Solutions; 2007


the operations, economic, and socio-economic needs of

today without compromising the ability of future generations to meet their own such needs.

Rod Ellsworth;Vice President, Infor Global Solutions; 2007


Current SituationNeed for Automated Continuous Commissioning

Equipment is not properly commissioned, operated nor maintained even though capabilities of PLC and BAS continue to increase and maintenance programs are in place

Improper operations lead to inefficiencies and reduced lifetime of the equipment

Commissioning and retro-commissioning fixes do not persists over time

Manual periodic commissioning can be expensive Field demonstrations of diagnostic tools indicate

Many assets are improperly operating, including those that are newly commissioned

Even when problems are identified, operators rarely take corrective actions


So, Just What is Continuous Commissioning?Continuous Commissioning Process

Preliminary Data Collection(e.g. equipment nameplate

information, set points, energy efficiency, operations limits)



Continuously monitor and run equivalent functional asset tests


Continuously record, analyze and interpret observations and

functional test results

Continuously record, analyze and interpret observations and

functional test results

Manually correct problems, change installation, replace, repair


Report results. Store and archive data

Report results. Store and archive data

Commission fixes

Commission fixes

Continuous Commissioning

• ongoing process for monitoring systems and assets, diagnosing and resolving issues, and making energy consumption as efficient as possible while maintaining or improving asset performance.• includes all asset life-cycle operating and maintenance aspects from physical maintenance, to control strategies, to prioritizing and implementing retrofits.

optimize current operations

Cost Benefits

20 % + energy reduction formonitored assets

DOE Continuous Commissioning Guide BookIndependent Study by Texas A&M


Integrating Sustainability into Asset Management Operations – 3 Steps

Step1: Quantify Energy Intensity & CO2 Footprint Direct Indirect

Asset performance : energy : generation : CO2

Step 2: Assess Company Risk Business Implications

Cost Regulatory Compliance Competitiveness

Step 3: Adapt in Response to Risk Maintain and Change Capital Infrastructure

< Energy Intensity & CO2 GAS Programs

It is envisioned that this is a continuous improvement process to ensure long term sustainability.

It is envisioned that this is a continuous improvement process to ensure long term sustainability.


… to improve a company’s overall equipment operating performance at the least cost and environmental impact. Energy is the single largest indirect operating expense; > 80% of O&M expense Energy is the largest contributor of CO2 Gases which comprise 63% of all GHG

… to improve a company’s overall equipment operating performance at the least cost and environmental impact. Energy is the single largest indirect operating expense; > 80% of O&M expense Energy is the largest contributor of CO2 Gases which comprise 63% of all GHG

Energy integration into EAM strategy…

Maintenance Program Management: factoring asset operating performance (Energy consumption) into maintenance strategy and activities

Alert Management: alerting of existing asset condition or trend outside of optimum operating parameters for assessment or remediation

Planning: assessing existing asset configuration (design basis) and performance (energy consumption) for optimization

Asset Sustainability Spend$208 Billiion N.A. Market

87%

13%

C&I Energy Spend

C&I Maintenance Spend

Improve OEE …at the least cost and environmental impact

Asset Sustainability Spend ($208B N.A. C&I Market)

4,475B kWh N.A. Energy Market 16,599B kWh World-wide Energy Market


Solving the ProblemInfor EAM Asset Sustainability; Continuous Commissioning Process







Continuously record, analyze and interpret observations and functional test results

Continuously record, analyze and interpret observations and functional test results



Report results. store and archive dataReport results. store and archive data

Infor Asset Sustainability is an enterprise repository

for all asset data

Infor Asset Sustainability is an enterprise repository

for all asset data

Infor Asset Sustainability alert management provides

continuous AFDD monitoring & testing

Infor Asset Sustainability alert management provides

continuous AFDD monitoring & testing

Infor Asset Sustainability alert management records,

interprets, and tests real time BAS and metering

observations

Infor Asset Sustainability alert management records,

interprets, and tests real time BAS and metering

observations

Infor Asset Sustainability automatically generates work

orders to rectify anomalies and validate fixes

Infor Asset Sustainability automatically generates work

orders to rectify anomalies and validate fixes

Infor Asset Sustainability quantifies results, and stores data for anomaly determinant

Infor Asset Sustainability quantifies results, and stores data for anomaly determinant

Commission fixesCommission fixes


Environmental Sustainability:Intuitive Actionable Information

The G.A.S. index reduces complex manufacturing and facility operating problems of optimizing asset design performance at the least total energy cost and environmental risk into simple, intuitive presentation of actionable information.

G.A.S. Index = Availability * Performance * Quality * Energy Efficiency

The G.A.S. index reduces complex manufacturing and facility operating problems of optimizing asset design performance at the least total energy cost and environmental risk into simple, intuitive presentation of actionable information.

G.A.S. Index = Availability * Performance * Quality * Energy Efficiency


Environmental Sustainability:Operating Performance vs. Energy Cost

Infor EAM Asset Sustainability Edition

Asset performance management can reduce energy consumption by 6% to 20% These percentages have been established by international studies which indicate that a company’s asset management operations would benefit from integrating energy consumption into their asset management strategy.

Terry Wireman; Benchmarking Best Practices in Maintenance Management ISBN: 0-8311-3168-3

Asset performance management can reduce energy consumption by 6% to 20% These percentages have been established by international studies which indicate that a company’s asset management operations would benefit from integrating energy consumption into their asset management strategy.

Terry Wireman; Benchmarking Best Practices in Maintenance Management ISBN: 0-8311-3168-3



Comprehensive GHG emissions management. Direct and indirect CO2 determination by fuel type or fuel mix of provider. Performance benchmarking

Comprehensive GHG emissions management. Direct and indirect CO2 determination by fuel type or fuel mix of provider. Performance benchmarking

Environmental Sustainability:

Environmental Impact



In conclusion, do you know…

If your asset operations performance consume more energy than it was designed to consume?

If some assets are consuming more energy than a like or comparable asset in

your enterprise?

If there are more energy efficient products and if they could impact your operation and financial performance?

How energy consumption impacts your asset repair vs. replace analysis?

How your operations energy efficiency compares to industry benchmarks and guidelines ?


Next Step?

Thank you for attending today’s Webinar on

“Six Key Metrics to Align Asset Management & Energy Efficiency.”

Contact Infor? Call Infor at 1-800-260-2640 Email Infor at [email protected]

Next step? Take the Green Assessment: go.infor.com/green Demo & report:http://www.infor.com/goinggreen/solutions/greeneam/as/ Attend the next live demo of Infor EAM Asset Sustainability Edition on

June 26: http://www.infor.com/company/events/

Infor Confidential Template V.24, 1-Mar-2007 Bruce Gheesling – Sr. V.P GAS March 20, 2007 David Berger; Contributing Editor, Plant Services magazine –

Documents

infor global solutions

asset oee

infor confidential template

asset performance management

lifecycle cost slide

key metrics

insufficient oee

incorrect metrics